The big news that shocked investors when Meta Platforms (META 2.52%) released its third-quarter update in late October was the social media company's plans for capital expenditures to soar in 2026. While the company didn't provide the exact figure at the time, management indicated that the dollar growth in capital expenditures in 2026 would be significantly higher than it was in 2025. In other words, management was essentially saying: Expect a figure north of $100 billion.
With the tech giant's fourth-quarter results (along with management's full-year outlook) out, we now have a much better idea of where exactly capital expenditures may fall in 2026. Meta said in its fourth-quarter update on Wednesday afternoon that it expects capital expenditures for the year to be between $115 billion and $135 billion.
Here's a closer look at Meta's fourth-quarter results and what this number means for the company and investors.
Image source: Getty Images.
Undeniable momentum
Meta's revenue in Q4 rose 24% year over year, putting its top line at $59.9 billion for the period. Showing how the company finished the year strong, this is a higher growth rate than its full-year 2025 revenue growth of 22%.
Even more, Meta managed to grow its earnings per share 11% year over year in Q4, even as costs and expenses soared 40%.
Fueling the quarter was a 7% year-over-year increase in daily active users across its platforms, 18% growth in ad impressions, and 6% growth in average price per ad.
And if you had any doubts about whether the company's investments in AI (artificial intelligence) are paying off, think again. The midpoint of management's guidance for first-quarter revenue of $53.5 billion to $56.5 billion implies a year-over-year revenue growth rate of 30% -- a huge acceleration.
Soaring costs
With all of this said, accompanying Meta's soaring growth is even faster spending growth.
Starting with Meta's outlook for capital expenditures in the range of $115 to $135 billion, the midpoint of this forecast calls for 73% year-over-year growth -- and that's on top of 84% growth in 2025.
Growth in capital expenditures like this is fundamentally changing Meta's cost structure. Indeed, this is why management expects one of its largest drivers in 2026 expense growth to be higher depreciation. After all, most capital expenditures begin as a cash item on the cash flow statement and eventually find their way to the income statement in the form of depreciation -- and Meta's big spending on AI infrastructure is doing just that.
Indeed, turning to the income statement, management said it expects full-year 2026 total expenses to be between $162 billion and $169 billion. The midpoint of this guidance range implies more than 40% year-over-year growth.
The net result? Even though Meta clearly expects to start 2026 with a significant step-up in revenue growth, management's guidance for operating income this year didn't have the same sizzle. Management simply said it expects full-year 2026 operating income will be "above" 2025 operating income.
In fact, we're already seeing the deleveraging in Meta's earnings profile caused by its big spending. The company's 11% year-over-year earnings-per-share growth in its fourth quarter lagged its 24% revenue growth by a wide margin.
NASDAQ: META
Key Data Points
Is the big spending worth it?
The big question on investors' minds, therefore, is whether or not this big spending will eventually pay off for Meta.
Sure, based on management's first-quarter outlook, it looks like it's already starting to pay off in top-line growth. But this spending will likely be a drag on earnings-per-share growth in 2026. So investors will need to look beyond 2026 to decide whether these investments will ultimately be worth it. If these investments help Meta build a personal superintelligence like the company hopes to, and revenue growth remains at elevated levels beyond 2026, the deleveraging we are seeing today in Meta's growth profile could turn into operating leverage later on.
Fortunately, the stock's valuation going into the earnings wasn't extraordinarily high relative to Meta's recent strong growth, so investors seemed to be leaving some room for error if the company's investments don't pay off handsomely. But with the stock soaring about 8% in after-hours on Wednesday as of this writing, investors clearly have more confidence that Meta's year of massive spending will be worthwhile.
